Often, by the time a nursing facility resident is approved for Medicaid benefits, there remains a balance owed to the facility for services rendered prior to eligibility. This can be due to a delay in an application or other complications that occur during the Medicaid process.

Luckily under federal and state law, facilities and providers can still be reimbursed for the nursing care that occurs prior to eligibility. Under Federal regulations a state is required to take into account certain expenses when determining the monthly contribution towards the cost of care. (See 42 U.S.C. § 1396a(r)(1)(A)). Specifically, the statute provides that “with respect to the post-eligibility treatment of income of individuals who are institutionalized . . . there shall be taken into account amounts for incurred expenses for medical or remedial care that are not subject to payment by a third party . . . .”

This means that nursing facilities may submit the unpaid cost of care provided to the resident and that state will deduct those expenses when determining the Patient Pay Amount. Although the state will never pay more than the Medicaid rate, over a period of time the change in the Patient Pay Amount will reduce the debt owed to the facility.

States may set “reasonable” limits on the amounts of these expenses but these limits must be established in the State Plan and approved by CMS. Some states limit the expenses by a period of time other states limit the allowable deductible expense by prohibiting those expenses that occurred during a penalty period. If a state is silent on limitations, courts have found that the State is required by federal law to allow all of a recipient’s income to be allocated toward to past-due health care expenses.

Trisha Cowart works out of the New York City office along with Senior Associate Eva Signore. The office is conveniently located in the Flatiron district of Manhattan.